A new study from the USC Sol Price Center for Social Innovation finds a majority of renters surveyed in Los Angeles have cut back on critical basic needs like food, and nearly half took on additional debt in order to afford rent over the past two years, it was announced today.
The study documents the deep economic vulnerability of many city residents even prior to the COVID-19 pandemic. Three out of four households surveyed were rent burdened, meaning they spent over 30% of household income on rent and utilities. Nearly half of renters surveyed were severely rent burdened, spending over half their household income on rent and utilities.
The results suggest many Los Angeles renters were already living on the razor’s edge of food insecurity and homelessness prior to the coronavirus crisis, with implications for other urban regions across the country.
“This study tells us that many residents were already deeply economic distressed before the COVID-19 pandemic,” said study co-author Gary Painter, director of the social innovation center and the Homelessness Policy Research Institute. “The pandemic has further revealed just how many Americans live paycheck to paycheck, one unanticipated bill away from losing their homes. We must act now before these catastrophic conditions leave thousands newly homeless.”
Researchers used the results from an in-person survey of 800 renter households in South and Central Los Angeles between January and October 2019. Conducting the survey in both English and Spanish, surveyors asked renters about their housing and economic situations and how rental costs impacted their lives.
The study found a majority of renters were significantly cutting back on basic needs, sometimes for years, in order to afford rent. More than 60% of renters reported cutting back on food, 45% on clothing and 33% on transportation in order to afford rent. Almost half delayed bill payments or took on additional debt during the previous two years to make rent payments.
In addition, the research showed that cutbacks were more severe in Central L.A. — where rent was increasing the most and where rent has also been increasing for longer — versus South L.A. Central L.A. households were also more likely to have reduced spending on health and medicine, education and family activities than those in South L.A.
Finally, one in five households said they weren’t able to cover an unexpected $400 expense. Two in five said they would have to take on additional debt to cover the expense, with 28% saying they’d need to piece together multiple money sources to do so.
The study also uncovered racial and ethnic differences in responses: White and Asian households were less likely to be rent burdened than Latino and Black families, and households surveyed in Spanish were significantly more likely to be rent burdened and severely rent burdened than households surveyed in English.